My (almost) three year old loves money---don't we all?! While many people will say that you shouldn't discuss money with young children because it adds an unnecessary burden to their young shoulders, I beg to differ. I do agree that there is no need to lay a heavy responsibility on a young person where money is concerned. Meaning, they don't need you to tell them about all of your bills that are (barely) getting paid, all of your outstanding debt, that you might not have a house if you don't pay a certain bill, etc. But I do think that we can start instilling important values in our children at a very young age to help them to understand the importance of being responsible with their money---and hopefully, they won't have to worry about all of the problems mentioned in the previous sentence!
In my home growing up, money was always scarce, and it was a burden to every member of our family. But there was still a credit card. We might not be able to put food on the table or pay bills, but if there was something that my dad really wanted, or if there was something that really had to be paid, out came the credit card. Neither my husband nor I were really trained in how to manage finances, and in my case, that's because my parents didn't manage theirs. They just survived--somehow. No one ever taught us that if you don't have the cash in the bank to pay for it, then don't put it on a credit card.
We've had a long, hard road in the short five years we've been married, and a lot of debt has been put on credit cards. We would have loved to do the Dave Ramsey program, but we couldn't even afford to do that by the time we realized how far we had sunk. We are (slowly) by the grace of God, beginning to float back to the top of the pool we have been drowning in. Over a year ago we chopped up all of our credit cards and started living cash-only. Not an easy thing to do when we are living on one income and our debt was 60% of our annual income!
I desperately tried to learn how to save money with coupons, and was failing miserably. The only thing that kept me fighting my way through sales ads, coupon clipping and organizing, money-saving blogs, and all the lingo floating around on those sites is that fact that I had to do this. Couponing was going to be key in our fight for survival. God brought two ladies along my path who each had been couponing for a while and each held a couponing class. Between these two classes, and the fact that I'd been trying my hand at this for some months prior to a class, I began to have "successful" money-saving shopping trips. The fight was hard, my stress level (and sometimes my blood pressure) was high, but I kept plugging away. Eventually, I was bringing home receipts of 50%, 70% and even 90% savings! Now it's the norm for me to see such savings reflected on my receipt, and I get disappointed when I have to buy basic items that never go on sale and my receipt doesn't reflect at least a 30% savings. I still get elated with each money-saving shopping trip.
We now actually have a savings account and money in that account! Each month I pull out the budgeted amount of money for groceries (in cash), and each month I have a goal for how much I want to have left in my wallet at the end of the month. Some months it is more, and some it is less, but whatever it is, that excess goes into our savings account. Last month our bank account actually had money left in it at the end of the month! And we put that into savings. Each time I get a cash-rebate on an item, rather than putting that money back into my grocery budget, we automatically deposit the rebate into our savings account.
So now we are a cash-only household with a growing savings account---but still a small mountain of debt remaining. At the beginning of this year we sat down and wrote out some financial goals. Our main goal was to be out of debt by the end of this year. We've had a few hindrances and obstacles come up, but we're still aiming for it anyway. Emma, a major Daddy's girl, frequently complains or asks about Daddy going to work. But she also will tell you why he goes to work, so that we can live in our house and have food to eat and can put gas in our car. I think we can easily relay these concepts of earning and spending money into our children at an early age.
We don't share our financial burdens with our daughter. But she does know that sometimes we can't do things because they cost too much money. Why shouldn't a child be taught such a thing? It would be a bigger crime for both the parent and the child if the parent indulged the child's every whim, and the child never had a concept of paying his way. (I went to college with plenty of kids who had no concept of paying for anything--I often wondered (and still do) how those kids survive once they hit the real world and have to start earning their keep.) My daughter will often tell someone, "I want to do something, but we can't because we don't have lots and lots of money," or something along those lines. I'm not teaching her that so people can feel sorry for her and giver her a hand-out. I'm teaching her that so that she realizes that we can't just have whatever we want whenever we want it. In part this is teaching her to deny her flesh. One thing we stress over and over is that God has blessed us with the things we have, and that we need to remember to be thankful for what He has given us. Now when we say something like that she will stop what she's doing and thank God for whatever item we are talking about at the moment. (She's so cute!) It is important to help my child learn thankfulness and contentment.
Over the last few months, there have been large things that Emma has asked for and has been told that we can't do because we don't have enough money. At this point, the concept of money was too far over her head. So we decided to bring it down to her level, and now I'm getting to the real point of this whole post. We discussed some jobs that we knew or thought she should be able to handle, and we downloaded a chore chart for her, and customized it in Adobe. To get this:
We've been doing this now for three weeks, and it is now habit for her to open the blinds when she gets up and close them when Daddy comes home (or the sun goes down). She still needs reminded to put on clean panties each day. :) But each of these items on this list are becoming habit now. No, we don't make our three-year-old take out the trash, but she likes to put the clean bag in the can, so we made that one of her jobs. These are simple tasks, but she's learning responsibility, and she love to be able to put a star on the chart! (We had been using stickers, but ran out, so now I just draw a star on the chart.) For each completed chart she gets $1.
Up to this point, we still haven't gotten to the money side of the chart yet. She knows that when she does a job she gets a star, and when all of the boxes have stars she gets money. She also knows that she is saving her money to go to the circus, "A long time away," in October. But because I've had no easy way of keeping track of her money, I haven't really paid her anything yet. In addition to saving money for the circus, I wanted her to begin learning the concept of offering her money to God. She already takes money to Sunday School each week, but of course it's our money. Since she is going to be making money, I want her to understand that it needs to be her money that goes in the offering. I also think it would be nice for her to have some money of her own to spend on something from time to time. And so, after a (very) little bit of searching, I found this:I love it!! This is a transparent (meaning my daughter can see what's in it) piggy bank with 4 different compartments: save, spend, donate (offering), and invest. The only thing that could make it better is if it kept track of how much was in there! I think this just landed high on her birthday list. :) I've noticed in the last few days a lack of excitement in her chores. While I do want her to obey because she was told to do something, this is a little different. This is a job she was given and told she'd be paid for. Wouldn't you lose your enthusiasm for your job if you weren't getting paid (or rewarded)? Well, I think this will help bring the excitement back as she'll be able to see the money she's earning and be able to begin learning now the responsibility of saving some, the freedom of spending some, and the reward of giving some. Not sure what to do with the "invest" section yet. :)
I saw some systems that do keep track of the child's money, like an ATM system. But she will tell you that credit cards are pretend money and are not good to use. I thought it would be somewhat backward reasoning if we got her something that required her to use a debit card. If someone else has something they've used or an idea they like, I'm open for suggestions!